Shareholder Returns to Rise to 50%... This Stock Is Expected to Pay Larger Dividends

[Financial News] Daishin Securities raised its target price for DB Insurance from 200,000 won to 250,000 won on the 3rd, saying, "Dividend expansion is expected following the new Value-Up Policy and the acquisition of Fortegra." It maintained its 'Buy' rating.
Hyejin Park, a researcher at Daishin Securities, explained, "Total shareholder returns are expected to increase following the acquisition of Fortegra and the newly announced Value-Up Policy." She added, "Even under conservative assumptions, we expect total dividends to increase by 90 billion won in 2027 and 100 billion won in 2028 compared with previous estimates."
After completing its acquisition of Fortegra, DB Insurance announced Value-Up Policy 2.0. The company had previously planned to raise its shareholder-return ratio to 35% on a separate-basis basis by 2028. Under the new policy, it will raise the ratio to 40% on a consolidated basis and 50% on a separate-basis basis by 2030. It also plans to increase dividends per share (DPS) by at least 10% annually.
At the end of last year, DB Insurance's dividend payout ratio on a separate-basis basis was 29.7%. Park expects the shareholder-return ratio to rise by approximately 4 percentage points each year through 2030 under the new policy. Compared with previous estimates, she also expects it to be about 2 to 3 percentage points higher each year.
She assessed DB Insurance's dividend capacity as sufficient. As of the end of June this year, the company's distributable dividend resources stood at 2.6 trillion won. Applying Daishin Securities' estimated dividend of 600 billion won for this year, the dividend coverage ratio (DCR) is 433%. This falls within the excess range above the 400% threshold set by the company, indicating that additional dividends are also possible.
Park analyzed, "Although distributable dividend resources at year-end may change depending on interest rates and increases in reserves for surrender benefits, additional dividends are possible based on the figures as of the end of June."
The strategy of refraining from competing aggressively for new contracts was also cited as a positive factor for dividend growth. Rather than increasing new contracts excessively, the company plans to focus on reducing the deterioration of its contractual service margin (CSM) and the increase in business expenses while securing distributable dividend resources.
Park explained, "It is highly positive that the company is avoiding competition for new contracts, preventing CSM deterioration and increases in business expenses, and, above all, seeking to secure dividend resources." She added, "We raised our target price to reflect upward revisions to our 2027–2028 earnings estimates following the inclusion of Fortegra's results, as well as the expanded dividend policy."   
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